Apple is in hot water with European regulators, facing a massive $38 billion fine for violating rules on how it runs its App Store.
On Monday, the European Union regulators hit Apple with charges under their new digital competition laws. They accuse Apple of stopping app developers from directing users to cheaper options outside the App Store.
The European Commission’s investigation found that the restrictions on developers breached the Digital Markets Act (DMA), which aims to prevent tech giants from dominating digital markets. This violation could cost 10% of its 2023 global revenue, totaling a staggering $383 billion.
What is DMA?
The EU’s Digital Markets Act (DMA) was enacted in March 2023, focusing on major tech companies like Alphabet, Amazon, Google, Bytedance, Meta, and Microsoft. This legislation requires app developers to notify customers of more affordable alternatives and guide them to these options. Apple has until March 2025 to address these findings before the Commission reaches a final verdict.
In addition to this, regulators have launched a new investigation into a 54-cent “core technology fee” Apple charges developers for each app download outside the App Store. Critics argue this fee could discourage many free apps from seeking alternatives to the App Store.
European Commissioner for Competition Margrethe Vestager expressed concerns on social media, stating that new fee structure might hinder developers from operating alternative marketplaces and reaching users on iOS.
Apple’s Statement
Apple, on the other hand, stated that it has made several changes to comply with the DMA, assuring that most developers would pay the same or less under the new terms. They claim to have introduced new features that allow developers to direct users to external websites for purchases.
The company promised to continue discussions with the Commission and adapt as needed. Do you think these regulations will change how big tech companies operate in Europe?